When someone gets owned, trolled, or pranked badly by someone, especially when the prank involves black people.
This word originated from the prank where a person sets his friends desktop as a naked black man. Later on, this term expanded on to include white men as well, and finally it is now a term for general owning, trolling, or pranking.

Modern Usage:
*Freddie puts salt into Jacob's coke and then pisses into it*
*Jacob then drinks the coke*
Jacob: WTF IS THIS SHIT?!!?!?
Friends: HAHAHHAHA you got nigged by Freddie, he put salt in it then pissed in it!!